Power

What is Probability?

How to Interpret Probability

Mathematically, the probability that an event will occur is expressed
as a number between 0 and 1. Notationally, the probability of event A
is represented by P(A).

If P(A) equals zero, event A will almost definitely not occur.

If P(A) is close to zero, there is only a small chance
that event A will occur.

If P(A) equals 0.5, there is a 50-50 chance that event A will occur.

If P(A) is close to one, there is a strong chance that
event A will occur.

If P(A) equals one, event A will almost definitely occur.

In a
statistical experiment, the sum of probabilities for all possible outcomes
is equal to one. This means, for example, that if an experiment
can have three possible outcomes (A, B, and C), then P(A) + P(B) +
P(C) = 1.

How to Compute Probability: Equally Likely Outcomes

Sometimes, a statistical experiment
can have n possible outcomes, each of which is
equally likely. Suppose a subset of r outcomes are
classified as "successful" outcomes.

The probability that the experiment results in a successful
outcome (S) is:

Consider the following experiment. An urn has 10 marbles. Two
marbles are red, three are green, and five are blue. If an
experimenter randomly selects 1 marble from the urn, what is the
probability that it will be green?

In this experiment, there are 10 equally likely outcomes, three of
which are green marbles. Therefore, the probability of choosing
a green marble is 3/10 or 0.30.

How to Compute Probability: Law of Large Numbers

One can also think about the probability of an event in terms of its
long-run relative frequency. The relative frequency of
an event is the number of times an event occurs, divided by the
total number of trials.

P(A) = ( Frequency of Event A ) / ( Number of Trials )

For example, a merchant notices one day that 5 out of 50 visitors
to her store make a purchase. The next day, 20 out of 50 visitors
make a purchase. The two relative frequencies (5/50 or 0.10 and
20/50 or 0.40) differ. However, summing results over many visitors,
she might find that the probability that a visitor makes a
purchase gets closer and closer 0.20.

The scatterplot above shows the relative frequency of purchase as
the number of trials (in this case, the number of visitors) increases.
Over many trials, the relative frequency converges toward
a stable value (0.20), which can be interpreted as the probability
that a visitor to the store will make a purchase.

The idea that the relative frequency of an
event will converge on the probability of the event,
as the number of trials increases, is
called the law of large numbers.

Test Your Understanding

Problem

A coin is tossed three times. What is the probability that
it lands on heads exactly one time?

(A) 0.125
(B) 0.250
(C) 0.333
(D) 0.375
(E) 0.500

Solution

The correct answer is (D). If you toss a coin three times, there
are a total of eight possible outcomes. They are: HHH, HHT,
HTH, THH, HTT, THT, TTH, and TTT. Of the eight possible outcomes,
three have exactly one head. They are: HTT, THT, and TTH.
Therefore, the probability that three flips of a coin will
produce exactly one head is 3/8 or 0.375.